Mary Barra, President and CEO of General Motors Company (GM), speaks during the Milken Institute Global Conference in Beverly Hills, California, on May 2, 2022.
Patrick T. Fallon | AFP | beautiful pictures
DETROIT – Shares of Synthetic engine on Thursday, hit a 52-week low and opened at its lowest price since November 2020, after Wells Fargo downgraded the stock and significantly slashed the company’s price target.
Wells Fargo analyst Colin Langan downgrades GM after the market closes on Wednesday from “underweight” from “overweight,” and cut the company’s price target from $74 a share to $33 a share.
This year could be the peak of profits for legacy automakers, with the shift towards electric vehicles eroding profits in coming years, he said in a note to investors.
“We see obstacles from price normalization, inflation costs and 2023 UAW contract negotiations. We are therefore concerned that 2022 could be the most profitable as GM will increasingly be forced to incur BEV losses to meet high US regulatory hurdles in 2026,” he said.
For the same reason, Langan on Wednesday was also downgraded Ford Motor “lightweight” and halved its price target from $24 per share to $12 per share.
GM stock fell about 6% to $35 on Thursday morning after opening at its lowest level since November 2020. The company’s market capitalization is about $51 billion.
Shares of Ford fell more than 4% to $12.27. The stock’s 52-week low is $11.28 a share as of May 2021. Ford’s market capitalization is about $49 billion.
Ford Chairman Bill Ford during the company’s annual shareholder meeting on Thursday said he remains optimistic about the automaker’s long-term business plans, despite the stock’s performance this year. .
“In 2021, our stock sold out. This year it’s going back to Earth a little bit. The whole market is going back to Earth, but I’ve never been more confident in my future,” he said. “. Then added, “you can’t manage a business by stock price, you manage a business to build a great and lasting company.”
Shares of the Detroit automakers were already under pressure before being double downgraded by Wells Fargo. Both stocks are down nearly 40% this year.
